If you’re a U.S. expat who hasn’t filed taxes in years, you’re not alone—and you’re not out of options. Many Americans abroad miss the tax deadline simply because they weren’t aware of their filing obligations. The good news? You can still file your past due tax returns and often avoid penalties entirely.
This guide offers straightforward guidance on filing past due returns, explains potential consequences, and empowers you to become compliant with confidence—no fear tactics, just facts.
What Happens If You File Taxes Late?
The IRS may impose two main types of penalties and interest:
- Failure to File Penalty: This is typically 5% of the tax owed for each month your return is late, up to 25%.
- Failure to Pay Penalty: This is usually 0.5% of unpaid tax per month.
The IRS also charges interest on top of these penalties. So the later you file, the more you may owe. The minimum penalty for returns more than 60 days late is either $485 (for 2024) or 100% of your unpaid taxes, whichever is less.
What happens if you don’t file by June 15th? For U.S. expats, penalties for late filing begin accruing after June 15, while late payment penalties and interest begin accruing after the original April 15 deadline if taxes are owed.
In addition to income tax returns, the IRS also enforces separate penalties for failing to file informational forms, such as Form 5471 (for foreign corporations), Form 8938 (for foreign assets), or FBAR (Foreign Bank Account Report). These are not tied to any tax owed, but the penalties can still be steep—often $10,000 or more per missed form, per year. Failure to file these forms can trigger audits or delay the processing of your return, even if no additional tax is due.
If you don’t file your tax return at all, the IRS may file a substitute return on your behalf—without applying deductions or tax credits you may qualify for.
How to File Past Due Tax Returns (Step-by-Step)
1. Gather Your Documents
- W-2s, 1099s, or foreign income records
- Foreign bank account info (for FBAR/FATCA)
- Prior year tax return (if available)
- Records of estimated tax payments
Related: How To File Taxes Without a W-2 as a U.S. Expat
2. Determine What You Need to File
If you’re a U.S. expat, foreign activities often trigger additional filing requirements—including informational forms that U.S. residents typically don’t need to file. These may include Form 5471 for foreign corporations, Form 8938 for foreign financial assets, Form 8621 for passive foreign investment companies (PFICs), and more.
What you’re required to file depends on your individual circumstances: where you live, how you earn income, and which foreign accounts or assets you hold. To get a full picture, review our Expat Tax Forms Guide which outlines the most common forms triggered by foreign activity.
You need to file a federal income tax return for every year your income exceeded the filing threshold. This includes self-employment, investment, and foreign income.
3. Choose a Filing Method
You can file using the IRS website, a commercial tax software, or with a tax professional. However, many DIY software options don’t support the foreign forms expats need—unless you purchase their high-tier or professional license (intended for tax preparers).
Research your software before starting—many expats waste hours only to find key forms are missing. We recommend using a preparer who specializes in expat returns.
You can e-file recent years, but older returns generally must be printed and mailed to the IRS.
4. Submit Payment (If Applicable)
Even if you can’t pay the full tax bill, file your return anyway. Partial payment is better than none and will stop the failure to file penalty from increasing. You can request a payment plan from the IRS to spread out the remaining balance over time.
How to Minimize IRS Penalties
The IRS offers several programs and relief options that allow expats to catch up on missed filings without harsh consequences—especially if the noncompliance was non-willful.
1. Streamlined Filing Compliance Procedures
This is the most widely used IRS tax amnesty program for expats. If you didn’t know about your obligation to file and certify that your failure was non-willful, you may qualify.
Under this program, you can:
- File 3 years of past due federal income tax returns
- Submit 6 years of FBARs (FinCEN Form 114)
- Avoid failure to file penalty, failure to pay penalty, and even FBAR penalties
This is a life-changing option for expats who want to come into compliance without being penalized for honest mistakes. At 1040 Abroad, we specialize in using this program to help clients safely re-enter the U.S. tax system.
Related: Streamlined Procedures: Fix Your U.S. Taxes Without the Penalties
2. Delinquent FBAR Submission Procedures
If you’re up to date on your tax returns but only missed filing FBARs, you may qualify for this lesser-known amnesty path. You’ll submit the missing FBARs electronically through FinCEN, along with a statement explaining why you filed late.
It’s important not to use this route if you also need to file delinquent tax returns—in that case, Streamlined Filing is more appropriate.
3. Reasonable Cause Relief
If something beyond your control—such as illness, death in the family, or natural disaster—prevented you from filing, the IRS may grant penalty relief. You’ll need to explain the situation in detail and show that your actions were reasonable under the circumstances.
4. First-Time Penalty Abatement
This one-time waiver applies if you’ve filed and paid on time in prior years. If you’re otherwise compliant, the IRS may remove penalties from one tax year—no explanation required.
5. Act Quickly
Regardless of which option fits your situation, time is critical. The longer you wait, the more penalties and interest accrue. Late payment penalties and interest charges can snowball quickly. Filing now protects you from additional penalties, helps preserve any possible tax refund, and may give you access to more relief programs.
What If You Can’t Pay the Tax Bill?
Don’t panic. You have options:
- Request an Installment Agreement: Spread your tax bill over monthly payments.
- Offer in Compromise: If you can’t afford to pay, you may qualify for a reduced balance.
- Currently Not Collectible Status: Temporary relief if you can’t afford anything right now.
The IRS charges interest on any unpaid tax, but you avoid the worst penalties by filing your return.
Special Note for Expats
You may not actually owe taxes even if you haven’t filed in years. Between the Foreign Earned Income Exclusion (FEIE) and foreign tax credits, many expats eliminate or greatly reduce their tax owed. You could even be eligible for a tax refund thanks to the refundable additional child tax credit.
What If You Received an IRS Notice?
If the IRS has contacted you via an IRS notice, don’t ignore it. We can help you respond appropriately and protect your rights. Often, notices are automated and can be resolved by simply filing your tax return.
Key Deadlines and Terms to Know
- Tax Day (Aprl 15 or 18): Standard filing deadline
- Tax Filing Extension: Expats automatically get a 2-month extension to June 15
- Due Date: The date by which your return and payment are due
- Outstanding Taxes: Any unpaid tax from a prior year
Why Work with 1040 Abroad?
At 1040 Abroad, we:
- Specialize in helping expats file late without penalties
- Have filed thousands of past due tax returns
- Guide you through penalty relief options
- Never use scare tactics
Our mission is to empower you with the knowledge that you can file and become compliant. We believe in your right to fix things without fear.
Get Caught Up and Move Forward with Confidence
Filing taxes late can feel overwhelming, but you have more power than you think. Whether you’re an expat behind on one year or ten, now is the best time to get caught up.
The IRS rewards voluntary compliance. You don’t need to fear the process. With help from 1040 Abroad, you can file your return, get back on track, and avoid unnecessary penalties and interest.
If you have questions or want to know where to start, reach out. We’re here to help you take the first step toward peace of mind and financial clarity.
